Shares of Summit Therapeutics (NASDAQ: SMMT) rocketed 123.4% higher this week through Thursday trading, according to data from S&P Global Market Intelligence.
A biotech stock surging that much usually means a new blockbuster drug candidate either posted good trial data or was approved for use. That's exactly what happened with Summit's lung cancer antibody Ivonescimab this week.
Besting Keytruda in a phase 3 clinical trial
Last weekend, Summit announced the results of its Harmoni-2 phase 3 trial, which was conducted in China in conjunction with its partner Akeso. In the trial, Summit's new drug Ivonescimab achieved a superior progression-free survival period relative to Keytruda, which is the current standard of care for lung cancer patients with a PD-L1 gene expression.
In the wake of the data release, Wall Street analysts hiked their price targets on Summit's stock, positing that Summit's Ivonescimab could unseat Keytruda in a $50 billion end market for PD-L1 lung cancer drugs.
Summit's stock subsequently skyrocketed on the news, and kept climbing through the week. Management took advantage of Wall Street's enthusiasm to raise $235 million in an equity raise announced Thursday. Summit said it accepted an offer from "leading biotech institutional and individual investors" to sell 10.35 million shares at $22.70.
Usually when a company sells stock to raise money, the stock goes down, due to the dilution. However, Summit then took another leg up, rising another 21% in the wake of the announcement.
This could be due to investors appreciating the confidence showed by these industry-focused investors, or that Summit now has funds to capitalize on taking Ivonescimab to market.
Summit is a new biotech to watch
Summit has increased by over 1,000% this year on the back of results for Ivonescimab.
It's very difficult now to know whether Summit is a buy or not at this point, as it's hard to know the revenue and profit impact of Ivonescimab going forward. But if Ivonescimab is ultimately a more effective option to combat this critical disease, Summit could even be undervalued, even after this big run.
Should you invest $1,000 in Summit Therapeutics right now?
Before you buy stock in Summit Therapeutics, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Summit Therapeutics wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $730,103!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of September 9, 2024
Billy Duberstein and/or his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Summit Therapeutics. The Motley Fool has a disclosure policy.
Why Summit Therapeutics Skyrocketed 123% This Week was originally published by The Motley Fool